In this world where we see MNCs as “Social Actors” there has been a growing need for Corporate Social Responsibility as they are not just economic actors but also “bear a responsibility” to social stakeholders (Hofferberth, 2011). However, in modern times more often than not it seems to be uses as a marketing strategy for greater commercial profit from the poor sucker consumers trying to do the right thing. This was best seen in the VW scandal.

In 2015 Volkswagen was caught up in an emission scandal that shocked the world not only because an MNC did something they shouldn’t have but due to the blatant violation of the tenants of Corporate Social Responsibility. The company had pledged under CSR to “go Green” to save the world selling cars under the disguise of being the designer of cheap environmentally friendly diesel engines. However, the company deliberately set out to circumvent emissions control with the aim of giving the company an unfair advantage over its competitors that made it the world’s number one car maker at the expense of the environment. It wasn’t just a single engineer who made this decision but everyone from the CEO down knew what was happening. The head of CSR instead of challenging the fake “cheat devices” turned a blind eye to the issue. The command chain that led to the development of certain lines of software that could put an engine into to test mode and then return it to “dirty mode” is on record, all the testing that was done is documented. Consumers on finding out not just the lie but the extent to which VW went to hide the lie shocked a massive worldwide recall and a massive hit to VW share. However, the reality was that VW, while definitely taking a hit, was still ok as people showcased that while the environment is important, a reliable fast car is more what they want. VW is still the number one world’s largest car manufacturer in 2018 regardless of the scandal and their head of CSR remains in his position. More work needs to be done to ensure CSR is taken seriously as while we claim in theory that CSR is the right solution for companies, the reality remains that until a regulatory body of CSR is established companies will always put CSR second to economic profit.

Citation:

Matthias Hofferberth et. al. (2011) “Multinational Enterprises as “Social Actors”—Constructivist Explanations for Corporate Social Responsibility” Global Society 25, 2: 205-226

Theo Legett (2018). How VW covered up their scandal. BBC News.

The issue I want to address comes in the recommendations made in the State of the Union address delivered by President of the European Commission Jean Claude Juncker addressing the need for an increase in FDI into Africa. The reason for this analysis is to understand the motivations behind EU sudden interest in providing more FDI leading to viewing Africa as a mutual business partner in light of the signing of a new deal between the two unions of the EU and AU. (Stopford, 1998).

Juncker calls Africa, Europe’s twin continent and discusses the need to invest in a mutual partnership (Juncker, 2018). He states that Africa is no longer a continent just meant to be looked at through the prism of development aid but now as a mutual business partner. It is worth noting that during the early twentieth century most of Africa had been colonized by Europe draining it of its resources and primary raw materials and was effectively used as a pawn by the European Nations in their quest for dominance. A century later, Africa once again seems to be used as a pawn to satisfy the European agenda to act as a “global player” under the disguise of mutual economic growth (Juncker, 2018). The timing also seems very suspicious that Europe has decided on “more private investment and trade with the African Union” (Juncker, 2018) as between 2000 and 2017 China has been loaning Africa nearly $143 billion dollars in loans to various governments which many scholars speculate as debt traps used by China to exert dominance over a region (CARI, 2018).

The pros to such a suggestion would be creating jobs within the African Union leading to less migration to Europe in the hope for employment. The standard of living in Africa could improve based of the increase in investment in development projects.  There would also be an increase in GDP per capita and the spending power of African nations. Europe could also challenge China by making Africa self-sustainable and providing them with the wherewithal to pay off the outstanding and ever increased loans, freeing them from the immediate threat of external influence.

The cons to such a mutual partnership is the lack of mutual respect between the nations. It is plausible that Europe could be using this deal to get a foothold into Africa and control over its decisions regarding Foreign Direct Investment as well as a governing authority on “sovereign decisions” (Juncker, 2018). The statements used by Juncker do not specify who would be receiving this funding and how it would be distributed within the African Nations. Who would benefit more and who would get less? There is also the possibility for repercussions to nations who do not sign on as seen in the previous AU-EU deal where Kenya refused to sign and was subject to heavy import tariffs.

In conclusion, is the purpose of this FDI meant to purely altruistic or is the true purpose supposed to be vested in self-interest? Am I being too skeptical in not buying into Junker’s “brother country” mentality when it comes to EU- AU relations?

Citations:

• Cini, M. (2016). European union politics. Oxford University Press.
• Jean Claude Junker (2018). State of the Union 2018: The hour of European sovereignty.
• John Stopford (1999) “Multinational Corporations,” Foreign Policy, 113